Freezing in NH

Colleges fear debt puts damper on donations

“I got a great deal with my financial aid, but I’m still paying tens of thousands of dollars,” said the Orlando, Fla., native. “And now they want more money? I think it’s just ludicrous.”

University fund-raisers are increasingly worried over young graduates like Minsky. They fear that with student debt ballooning today, campus coffers may be suffering tomorrow.

Um, yeah.  Hard to sqeeze out extra money when your student loans are eating you alive.  My school called all the scholarship recipients right after graduation.  I hate to tell you, but an 8k scholarship to a 32k school is not really as much help as you might think.  It reduces the loans by a bit, and elimates all those nice Pell grants, but not much else.

An article on CNN today highlights their “life after work” special section.

“The baby boomers were the first generation to have a lot more career freedom, but it seems like [for] at least some of them, that ended up not being the case,” Randall Hansen, a career advice writer for the Web site Quintessential Careers, said.

“They fell into a job that they kind of hated or didn’t get as much satisfaction from but stayed in because of first mortgages, and then college tuitions, and now that their kids are out of college, now they finally feel like they have the freedom to change careers.”

For Bob Shipley, retiring was a step toward freedom. “I decided I didn’t want to do that anymore,” he said of his 30-year career as a general manager in the laundry business.

Marrying his business savvy to an interest in wine, he and business partner Craig Ciciarri established a New Jersey-based company that allows people to make their own customized wine, picking everything from the grapes to the bottle’s label.

I guess I feel similar…I want to retire, to leave the rat race, but I don’t think I want to sit around every day. There are several things I’d like to do that I feel I can’t afford to do full time now but would have time for after retirement.

American dream still burns bright for many – but results vary

Interesting article about how men in their 30s are earning less than their fathers did, but overall family income is higher because more women work.

They see new cars and plasma TVs and other accoutrements everywhere, and they want them, too. “I think there are more demands made upon them materialistically, and it’s harder,” says Ms. Curtis. “Things have gone up in price, and I don’t think salaries are commensurate with that.”

I think that paragraph explains a lot of the problem for folks in the middle class.  When I was a kid most families had one car.  Now they have two, or three.   They had one TV, now they have five.  It is more expensive to live like everyone else, but there’s plenty of money if you’re willing to give up a few luxuries.  (I’m sticking to the middle class here, I know that minimum wage is a little trickier.) 

A False Sense of Security? You Must Own a Home

The wonderful world of leverage has lifted homeownership to near-record levels, and we thump our chests with pride at the prosperity and middle-class life that possessing a home implies. Hovering in the background, however, is a glaring statistic: Never before have homeowners actually had such a small ownership stake in the houses they occupy.

The reason is debt. Home prices have gone up a lot, but borrowing against homes has gone up even more in almost all of the last 20 years.

[…]

The culture of “own your home free of debt as soon as possible” had endured for decades. Through the 1960s and ’70s, owners’ equity ranged from 65 to 70 percent. As recently as 1983, some 52 percent of American homeowners who were 55 to 65 years old owned their homes without any mortgage debt — allowing them to be free of monthly installment payments during their retirement years. By 2004, however, that percentage had dropped to 36 percent, according to Federal Reserve data.

So how do you plan to retire?  I hope to have a house paid off before retirement.  My current house will not be that house, but maybe the next house will.  Either way I’d like to keep rolling the paid-off amount of each house into the next purchase.   Retirement calculators assume you’ll only need about 70% of your current income in retirement.  Some of that is the 6-10% you should already be putting into your 401(k), but the other 20+ percent can be housing.  I’m not going to spend any less on food and travel in retirement.